Lars Wingefors, the head of Embracer Group, feared the possibility of raising the price of games from the current $70 per counteract the increase in development costs, which is strangling the traditional market, which itself is suffering enormously from competition from other sectors of the industry. The opportunity to talk about it was an interview with Games Industry, in which several interesting topics were touched on.
Wingefors and Embracer Group have often hit the headlines in the last year due to layoffs, the closure of numerous studios and canceled projects, caused by a failure to invest in the group by the Arab fund, which left it financially exposed.
An inevitable solution?
“I’m not saying you can’t raise the price, but the reality is that no one has tried.” The CEO of Embracer explained, and then added: “If we created a huge role-playing game, for example, with 100 or 150 hours of gameplay, very polished and with a unique experience, Would consumers be willing to pay more? If they were, potentially more products of this type would come onto the market. But no one tried. It’s something we’ve discussed, but we’re adhering to industry practices at the moment. Will a single company try to raise prices one day? That remains to be seen.”
The last price increase in the triple A range occurred in 2020, reaching $70 / €80 and immediately becoming the subject of heated discussions, to which the issue of the uncontrolled increase in development costs and the stagnation of the market itself, with players who they prefer to always stay glued to the same games, such as Fortnite, Roblox or Call of Duty. Embracer has launched several AAs of its own, many of which have flopped, such as the recent Outcast: A New Beginning and Alone in the Dark, with the latter being a big investment which however did not attract enough audiences, as said by Wingefors himself.
“I think the video game industry is facing the same problem as all other industries, with inflation and rising development costs.” He continued to explain “It has been difficult to increase the prices of premium PC and console products. The price of these products has remained the same for many years, which means the profit margin is lower, and in addition there is a higher cost of capital. Ultimately, when making large investments or plays, you need to work with teams you have a lot of trust in, or with intellectual properties you have control over to get the full financial rewards.
Additionally, consumers have more content available to them than ever before. They love to indulge in established intellectual properties that they’ve already played in the past, which means it’s harder to convince them to try new things or new IP. It’s simply a challenge that we are all facing. It’s a reality we’ve adapted to over the past year, and we will continue to adapt.”
In fact it seems that Embracer is not against the price increase, but is waiting for someone else to take the first step, maybe Rockstar Games with GTA 6, for which we are already talking about a different selling price compared to the standard one, due to the size of the production. Moreover, Strauss Zelnik, the CEO of Take-Two, the publisher of the game, said that in his opinion the prices of the games are still too low compared to what they offer.
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